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The Roblox video game platform intends to go public through a direct list.
AFP through Getty Images
Roblox, which has delayed its initial public offering, has set a date for the direct listing of its shares.
The video game company is now going public “approximately or on March 10,” according to an amended prospectus filed Monday. Roblox is looking to sell 198,917,280 shares, but has not specified a price. In January, the company sold nearly 12 million preferred shares convertible into a private placement for $ 45 per share. Renaissance Capital said a listing at that price would value the company at more than $ 29 billion. Roblox said in the prospectus that the opening price of the approximately 199 million shares will be “determined by the buy and sell orders collected by the NYSE from broker-dealers”.
Roblox will be the fifth company to go public using a direct listing. Palantir Technologies (PLTR), Asana (ASAN), Slack Technologies (WORK) and Spotify Technology (SPOT) all used direct listing when they debuted in the public capital markets.
Roblox will trade on the New York Stock Exchange under the RBLX marker. Goldman Sachs, Morgan Stanley and Bank of America act as financial advisers in the agreement.
Founded in 2004, Roblox hosts child-friendly games focused on Lego block-like digital characters. On average, 37.1 million people come to Roblox every day to play games.
The company is not profitable. Losses expanded to $ 253.3 million for the year ended December 31, compared to a loss of $ 71 million for the same period in 2019. Revenues increased nearly 82% to $ 923.9 million for December 31 . It has 960 full-time employees. David Baszucki, co-founder, president and CEO of Roblox, has 70.1% of the total voting power, the prospectus shows.
Roblox’s path to direct listing has not been easy. In November, the company initially filed to go public using a traditional initial public offering. Then, in December, he delayed the offer after the strong debuts of
Airbnb
(ABNB) and
De Dash
(DASH) made it too difficult to determine the right price for shares.
In January, Roblox changed its mind about a traditional IPO, choosing to go public through a direct list.
Roblox’s change came after the Securities and Exchange Commission approved a change to the New York Stock Exchange rule, which allowed for direct listing of floors in December. Companies that use direct up-to-date listings can now sell new shares and raise fresh capital in a single large transaction directly on the stock exchange without subscribers.
Direct listings aim to level the playing field for investors. The price is set by the orders received by the stock exchange. For example, a designated market maker will determine the public opening price of Roblox based on the buy and sell orders that the NYSE receives from broker-dealers. The market maker will decide the opening price of Roblox in consultation with its financial advisors, Goldman, Morgan and BofA.
This is different from traditional IPOs, in which subscribers set the bid price. This sometimes leads to large appearances on the first day of trading.
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